The global regulatory landscape for sustainability and Environmental, Social, and Governance (ESG) reporting is set to evolve significantly in 2025 and beyond. With a wave of critical deadlines approaching, organisations must prepare to meet stringent new requirements that aim to enhance transparency, accountability, and sustainability practices.
From the European Union’s expanded Taxonomy and the Sustainable Finance Disclosure Regulation (SFDR) to the California Climate Disclosure Laws and the Corporate Sustainability Reporting Directive (CSRD), these frameworks signal a heightened focus on aligning business operations with environmental and social objectives. The introduction of new international standards, such as those from the International Sustainability Standards Board (ISSB) adds further fuel to an already burning set of sustainability deadlines.
Make sure to mark these dates down in your diary!
2024-2026: Corporate Sustainability Due Diligence Directive (CSDDD)
This directive requires EU member states to integrate corporate due diligence obligations into national laws by July 2026. Companies must identify, prevent, and mitigate adverse impacts on human rights and the environment throughout their value chains.
Who it applies to: Large EU-based companies and certain non-EU companies operating in the EU.
March to June 2025: European Green Bond Regulation (EUGBR)
A public consultation will refine the technical standards for green bonds, ensuring they meet sustainability criteria. The regulation aims to provide transparency and credibility in green finance.
Who it applies to: Issuers of green bonds within the EU, including financial institutions and corporates.
Mid-2025: Sustainable Finance Disclosure Regulation (SFDR)
The planned review of SFDR Level 1 will evaluate and potentially revise the rules for ESG disclosures to ensure greater consistency and clarity.
Who it applies to: Financial market participants, including asset managers, investment firms, and insurance providers operating in the EU.
21 May 2025: ESMA Fund Naming Guidelines & European Green Bond Regulation (EUGBR)
ESMA: Funds must comply with naming guidelines that reflect their sustainability characteristics, addressing concerns about “greenwashing.”
Who it applies to: Financial products, particularly funds marketed as ESG-focused, within the EU.
EUGBR: Marks the end of the transition period for compliance with the European Green Bond Regulation. All green bonds must fully adhere to the regulation’s standards.
Who it applies to: Green bond issuers in the EU.
30 June 2025: SFDR Principal Adverse Impact (PAI) Disclosures
Financial entities must disclose how their investments impact environmental and social factors for the 2024 fiscal year, using clear metrics to enhance transparency.
Who it applies to: Financial market participants in the EU.
2025: EU Taxonomy, ISSB reporting, and CSRD compliance
EU Taxonomy: Large companies must report on how their activities align with the EU’s six environmental objectives, with additional reporting on Do No Significant Harm (DNSH) principles and non-EU exposures.
Who it applies to: Large EU companies and financial institutions.
ISSB: Companies must submit sustainability disclosures aligned with the ISSB’s S1 (general sustainability-related risks) and S2 (climate-specific risks) standards for the 2024 financial year.
Who it applies to: Multinational companies adopting global sustainability standards.
CSRD: Companies under the previous Non-Financial Reporting Directive (NFRD) must report on their 2024 fiscal year activities using CSRD’s more detailed requirements.
Who it applies to: Companies already subject to NFRD in the EU.
End of 2025: Benchmark Regulation (BMR)
The transitional period allowing the use of third-country benchmarks ends. Companies must ensure benchmarks meet EU regulatory standards.
Who it applies to: EU entities using financial benchmarks from outside the EU.
1 January 2026: California Climate Disclosure Laws
California’s new laws require companies to report on climate-related financial risks (SB 261) and emissions (SB 253) starting with FY 2025 data, pending legal challenges.
Who it applies to: Large companies operating in California with over $1 billion in annual revenue.
2026: CSRD for new companies
Companies not previously under the NFRD must begin reporting on their sustainability practices for the 2025 fiscal year, adhering to CSRD standards.
Who it applies to: New companies falling under CSRD’s expanded scope.
2027: CSRD for SMEs and other entities
Listed small and medium-sized enterprises (SMEs) and specific exempt entities must begin sustainability reporting for their 2026 fiscal year.
Who it applies to: SMEs, excluding micro-enterprises, small credit institutions, and captive insurers.